Major Shareholder:

• China Shipping ¡V 59.87% interest

Company Subsidiaries:

• CS (Yangpu) Refrigeration (40.0%): Carries out container management and repair services for the group
• CS (Yangpu) (90.0%): Engaged in the includes domestic container shipping, cargo sales, slot booking, container transportation centre, transshipment, depot construction, repair, leasing, sale and purchase of containers, leasing, sales and purchase of vessels and container related business.
• Shanghai Puhai (50.0%): Engaged in the international container shipping, transportation of goods etc
• CS (Hong Kong) (100.0%): Provision of local agency services
• CS Asia (100%): Engaged in the sale, purchase and lease of vessels

The Group is one of the world's largest and fastest growing container-shipping companies based in China. it is principally engaged in the operation and management of International and domestic container marine transportation. According to BRS-Aphaliner, as at 30^th April 2004, the Group ranked as the 10^th largest container shipping company in the world by operating capacity.

As at 30^th April 2004, the Group operated a fleet of 113 vessels with total operating capacity of about 215,691 TEU. Also, 25 of these vessels had capacity of over 4,000 TEU. The average age of the vessels in the Group's fleet was about 9.7 years as at 30^th April, 2004 while average age of the Group's vessels with capacity of over 4,000 TEU and 5,000 TEU were 1.6 years and 1.7 years, representatively. The total operating capacity of the Group's fleet has grown rapidly over the five years ended 31^st December 2003 at a CAGR of about 19.3%.

As a 31^st March, 2004, the Group provided international shipping services along 44 trade lanes, among which 13 wer trade lanes operated solely by the Group, 10 were joint service trade lanes and 21 were trade lanes operated by other shipping companies but with container spaces being made available to the Group under slot exchange and purchase arrangements. Additionally, the Group operated 2 international sub-routes and was a party to slot exchange and purchase arrangement giving its container slots in 11 other international sub-routes operated by other shipping companies.

The Group's services cover over 90 international ports between China and, separately, North America, Europe and the Mediterranean, Japan, Korea, Southeast Asia, Australia, West Africa and the Middle East. In 2003, about 90.0% of the Group's revenue were derived from its international shipping services. In addition to its international business, as at 31^st March 2004, the Group also operated 9 domestic coastal trade lanes and 10-sub-routes in China covering about 20 ports from South China to North China. The Directors believe that the Group is a dominant market leader in the Chinese domestic container shipping market.

The Directors believe that the Group has the following competitive advantages:

• Leading market position in China, which has rapidly growing export industries
• Young fleet with lower operating costs for vessels
• Exploitation of market opportunities and strategic fleet expansion
• Experienced management team
• Flexibility to deploy resources
• Strong sales network with broad geographic coverage

• The cyclical nature of the container shipping industry could have an adverse effect on the Group's business;
• The Group's results of operations are affected by global trading volumes and economic, financial and political conditions
• If global container shipping capacity grows faster than demand for container shipping services, over-capacity will result and the Group's business may be harmed; additionally, because the Group intends to significantly increase its fleet's operating capacity over the next several years, it may be more sensitive to supply and demand imbalances.
• The Group operates in a highly competitive industry and if the Group does not compete successfully, its business growth and results of operations may be adversely affected.
• The Group currently benefits from restrictions on non-Chinese carriers that operate within China; if these restrictions are relaxed due to china's obligations under the WTO or otherwise, the Group's business may be harmed
• The Group's business s seasonal.

The Group plans to increase its fleet's total capacity so that is can be one of the carries to capitalize on the growing export and container flow from China. Furthermore, consistent with the industry trend toward employing larger vessels, the Group intends to increase the average capacity of its vessels. The Group plans to increase its fleet size to 144 vessels by the end of 2007 with a total capacity of about 434,000 TEU.

The Group is seeking to enter into an increasing percentage of longer team contracts for its international trade lanes as its fleet expands so as to benefit from more price stability and guaranteed cargo loads. The Directors believe that the implementation of this strategy of this strategy could shelter is from unfavorable market conditions during industry downturns and anticipated that an increasing percentage of the Group's revenues will be derived from such contracts. Additionally, the Group aims to obtain such longer-term contracts with its own dedicated sales force located in China together with the support of its overseas agents.

The Group continues to implement a number of initiatives to manage costs, including the establishment of additional global service centres, the building of transshipment centres, the pursuit of longer term fixed price fuel arrangements and higher utilization of its vessels. The Group already has a global customer service centre in Shanghai for processing shipping documents for its customers. The Group intends to establish additional service centres in its primary markets to further improve the efficiency with which shipping documents are processed internationally.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$7.8 billion (based on the offer price HK$3.675 per shares). The Group at present intends to apply the net proceeds as follows: